Correlation Between Dunham Emerging and Kngt Clb

Can any of the company-specific risk be diversified away by investing in both Dunham Emerging and Kngt Clb at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Dunham Emerging and Kngt Clb into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dunham Emerging Markets and Kngt Clb Larg, you can compare the effects of market volatilities on Dunham Emerging and Kngt Clb and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Dunham Emerging with a short position of Kngt Clb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Emerging and Kngt Clb.

Diversification Opportunities for Dunham Emerging and Kngt Clb

0.18

Correlation Coefficient

Dunham Emerging  Kngt Clb

Average diversification

The 3 months correlation between Dunham and Kngt is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Emerging Markets and Kngt Clb Larg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kngt Clb Larg and Dunham Emerging is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Dunham Emerging Markets are associated (or correlated) with Kngt Clb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kngt Clb Larg has no effect on the direction of Dunham Emerging i.e., Dunham Emerging and Kngt Clb go up and down completely randomly.

Pair Corralation between Dunham Emerging and Kngt Clb

Assuming the 90 days horizon Dunham Emerging Markets is expected to generate 0.83 times more return on investment than Kngt Clb. However, Dunham Emerging Markets is 1.2 times less risky than Kngt Clb. It trades about 0.09 of its potential returns per unit of risk. Kngt Clb Larg is currently generating about -0.08 per unit of risk. If you would invest  1,386  in Dunham Emerging Markets on December 19, 2024 and sell it today you would earn a total of  72.00  from holding Dunham Emerging Markets or generate 5.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Dunham Emerging Markets  vs.  Kngt Clb Larg

Dunham Emerging Markets

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dunham Emerging Markets are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Dunham Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kngt Clb Larg

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kngt Clb Larg has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Kngt Clb is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dunham Emerging and Kngt Clb

The main advantage of trading using opposite Dunham Emerging and Kngt Clb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Emerging position performs unexpectedly, Kngt Clb can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kngt Clb will offset losses from the drop in Kngt Clb's long position.

The idea behind Dunham Emerging Markets and Kngt Clb Larg pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.